Is railroad retirement worth it?

Yes, because recent awards are based on higher average earnings. Age annuities awarded to career railroad employees retiring in fiscal year 2022 averaged nearly $4,560 a month while monthly benefits awarded to workers retiring at full retirement age under social security averaged about $2,320.



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The average age annuity being paid by the Railroad Retirement Board (RRB) at the end of fiscal year 2022 to career rail employees was $4,020 a month, and for all retired rail employees the average was $3,210. The average age retirement benefit being paid under social security was approximately $1,650 a month.

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Yes, because recent awards are based on higher average earnings. Age annuities awarded to career railroad employees retiring in fiscal year 2022 averaged nearly $4,560 a month while monthly benefits awarded to workers retiring at full retirement age under social security averaged about $2,320.

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If you leave the railroad within 5 years of employment, your Tier I benefit will be transferred in total to the Social Security system.

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U.S. Railroad Retirement Board Tier I benefits, like social security benefits, will increase by 8.7 percent, which is the percentage of the CPI rise. This is the largest increase since 1981, when it was 11.2 percent. Tier II benefits will go up by 2.8 percent, which is 32.5 percent of the CPI increase.

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U.S. Railroad Retirement Board While railroad employees with less than 30 years of service may retire at age 62, their railroad retirement benefits are subject to early retirement (“age”) reductions if they retire before attaining their full retirement age.

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The monthly exempt amount for the first year of retirement in 2023 is $1,770. Exempt Amounts for Annual Earnings Test for Full Retirement Age Annuitants: In 2023, the annual exempt amount for full retirement age annuitants is $56,520. The monthly exempt amount for the first year of retirement in 2023 is $4,710.

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Those who were holding out hope for a strong contract might look for a new job after the deal failed to provide paid sick leave or put an end to strict attendance policies and strenuous schedules that require workers to be on call constantly, rail workers say.

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The railroad retirement system also provides, under certain conditions, a residual lump-sum death benefit which ensures that a railroad family receives at least as much in benefits as the employee paid in railroad retirement taxes before 1975.

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